2021 Education Roundtable

2021 Educational Roundtable – Welcome to the Webinar (0:00)

Scott Peterson: Welcome, everyone, to the 2021 Educational Round Table webinar. We hope you find the information we’re going to share today helpful. This year, Peterson Wealth Advisors has decided to focus on Estate Planning, and we look forward to reviewing your situation with you in the next couple of months.

A couple of housekeeping items: today’s presentation will be recorded and made available after the presentation. So, you don’t have to take copious notes; we’ll provide this for you again. If you have any questions, feel free to use the chat feature on Zoom. If your questions are general in nature and we feel they will be helpful for others to hear, we’ll try to address them during the webinar. If we’re unable to get to your question today, we’ll follow up with you after the webinar to make sure your questions are answered.

Disclaimers: Of course, every presentation has to have a disclaimer, right? We are not licensed attorneys. This presentation does not constitute legal advice; it is for educational purposes only. You should consult with a licensed attorney before implementing anything you hear in this webinar. That said, we work with hundreds of families, are pretty tuned into the estate planning needs of our clients, and will be sharing some valuable insights with you this morning.

First, let me introduce our presenters. I’m Scott Peterson, founder of Peterson Wealth Advisors. I graduated from BYU, am a Chartered Financial Consultant™, and have been working with retirees for about 35 years. When it comes to estate planning, I could go on for hours with true stories of estate planning triumphs and disasters. I’ll share a couple of them today to drive some points home.

Mark Whitaker is a partner with Peterson Wealth Advisors and has been with the company since 2015. Mark specializes in tax planning for retirees and frequently contributes to our blogs. If you read our blogs, you’ve read a lot of Mark’s work. He has also been invited to teach at Education Week. Mark worked for a local investment company as a financial advisor before joining Peterson Wealth Advisors. He holds both bachelor’s and master’s degrees in personal financial planning and is a Certified Financial Planner™.

Carson Johnson is an associate retirement advisor with Peterson Wealth Advisors. Before working with us, Carson worked for Fidelity Investments as a financial advisor. He holds a bachelor’s degree in personal financial planning from Utah Valley University.

Daniel Ruske is also an associate retirement advisor with Peterson Wealth Advisors. Before joining us, Daniel worked for an investment advisory practice in Salt Lake City. He holds a bachelor’s degree in personal financial planning from UVU and is a Certified Financial Planner.

Notably absent today are two of our all-star advisors, Jeff Lindsey and Alex Call. They’ll be monitoring the chat room for us today, so they are here, but you just can’t see them.

Today, we will cover several topics. First, I want to take a minute to talk about what exactly an estate plan is and why you need one. Then, I’ll turn the time over to Mark to talk about the legal documents or tools used in your estate plan. Carson will then take over and discuss choosing the right person for the right job in administering your estate. Daniel will talk about when to review your legal documents and what to consider. Finally, I’ll spend a couple of minutes talking about common mistakes we often see, and Mark will wrap up by discussing planning opportunities and making the most out of your estate plan.

Now, what we won’t cover today: this class is designed to be an entry-level class. For larger estates, particularly those exceeding $10 million, estate plans can be designed to reduce estate taxes. This is beyond the scope of our discussion today but is within the scope of what we do. Estate tax laws are always changing, and there are some tremendous estate tax reduction strategies available for larger estates until the government changes the rules, which can happen at any time. If we haven’t contacted you yet and you have a larger estate, we need to talk to ensure you don’t miss out on significant tax reduction strategies.

Why is an Estate Plan Important? (5:36)

Let’s get real for a minute. Why is an estate plan important? Our society requires some of life’s most important financial decisions to be made immediately after a loved one’s death when they are least capable of making good financial decisions. It’s a cruel reality, but that’s how it works. I’ve been helping people through this tender and painful time for the past 35 years.

If you care about your spouse and heirs, you’ll do everything in your power to create an estate plan that reduces the stress, worry, and uncertainty that comes with losing you. A properly drafted estate plan will not soften the sorrow of your death for your loved ones, but it will make their lives easier. It provides peace to loved ones, and peace is desperately needed. Lack of preparation needlessly adds to the cost, takes time, effort, and serves as a major distraction when your family should be focused on mourning your loss. So that’s why you need an estate plan.

A properly drafted estate plan will do three things. First, it will allow you to determine your own financial future. It designates who will take care of your financial matters when you’re unable to manage your affairs on your own. Second, it includes instructions on how you want to be treated concerning end-of-life issues. Third, it preserves your legacy.

Your legacy is not your money or your assets; your legacy is your family and the sweet connections they have with each other. A properly drafted estate plan preserves this legacy. As part of preserving your legacy, your estate plan instructs your heirs on how your assets should be distributed, when they should be distributed, and who has the responsibility of seeing that these distributions are made according to your instructions. A well-thought-out estate plan is a tool for passing on your values to the next generation.

I’ll turn the time over to Mark now, and he’ll tell us a little bit about the tools that need to be used in an estate plan.

Legal Documents (8:10)

Mark Whitaker: Thank you, Scott. As Scott touched on, an estate plan is a broad view of putting a plan in place so that things go where they’re supposed to, providing peace of mind for your children and families left behind. What I’m going to touch on are the tools that are used to implement that plan. These are things that many of us are pretty familiar with. Most people have heard of terms like having a will or a trust. These are the legal instruments or documents required to implement an estate plan. I want to go over a few of the most common tools used to implement an estate plan. We’ll talk about living wills, medical powers of attorney, durable powers of attorney, a last will and testament, and a trust.

I should preface this portion of the presentation by saying that all these documents may be known by other terms depending on the state in which you live. I’ll touch on some of those different names as we go through them. If one of these names doesn’t look totally familiar to you, it may be that the state you live in uses a different term for this document. For example, a living will is also known as an advance medical directive.

Let’s talk about a living will. Let’s say you go into the hospital for a serious surgery or after being involved in a car accident, and your situation is dire. When would you want your family to stop providing medical care? Under what circumstances would you like them to continue providing medical care? If you haven’t spelled this out beforehand, it will be a difficult situation for your family to make those decisions for you. An advance medical directive or living will, is that document where you lay out in a very standardized fashion what your desires are for healthcare, such as when you would like to stop receiving life support or whether you want to have CPR.

Every state has a standardized version of this document, and for good reason. When you go into the hospital and a doctor is reviewing your living will, they don’t have to look through a unique document for every person. It’s standardized, so they can quickly determine your preferences for medical care. Having this document beforehand is important.

The next document is your medical power of attorney. The living will lays out your preferences for receiving care under different circumstances, but if you’re in the hospital and unable to make decisions for yourself, there are other aspects of your medical treatment that the living will doesn’t address. A medical power of attorney authorizes a person to act in your best interest and make medical care decisions for you. You can see why this is important. You wouldn’t want to go into the hospital and have two children both thinking they are responsible for making decisions. Laying out beforehand who this person is a good idea.

The next document is the durable power of attorney. While the medical power of attorney gives someone the responsibility to act in your best interest for medical treatment, the durable power of attorney covers financial and legal matters while you’re living. The durable portion refers to who will have the power to pay your bills and manage your affairs even if you become disabled. This power can be customized with an attorney to limit or expand certain powers, but having this instrument in place makes it easier for someone to step in and manage your affairs if something happens.

Your last will and testament is probably the most common document. A will is incredibly important; it provides instructions for what happens to your assets and who takes care of your affairs when you die.
What’s going to happen to your stuff, right? What’s going to happen to your estate? It allows you to specify who gets what and how much they get. Within this document, you’re also going to specify who the person is that will manage your estate, known as the executor. Carson will jump into that a little bit later. It’s a basic tool to specify who gets what when you pass away, how much they get, and who is in charge of managing your estate after you’ve passed.

The next document I’ll talk about, and the last main one, is having a trust. A trust is a very broad term; there are many different types of trusts. This is a simple explanation of what a trust is. With a trust, you have more flexibility to specify what happens to your assets after you pass away. You can decide who gets what and how much they get, but it also includes a tremendous amount of flexibility. You can build in contingencies, such as what happens if certain situations occur. Should distributions be made in a different way? Under what circumstances would distributions or an inheritance be withheld from someone? A trust is a private contract that you can customize based on the circumstances of your family. As we go through the presentation, we’ll talk about some of the ways these documents can be customized.

With the tools of an estate plan, we talked about having all these documents in place to carry out your wishes. As part of this, you’ll need to have people in place to manage these affairs. I’ll turn the time over to Carson, who will talk about choosing the right people to implement your estate plan.

Estate Planning Roles (15:27)

Carson Johnson: Thank you, Mark. I appreciate that. One of the greatest decisions you can make as part of an estate plan is selecting people to be a part of your plan. This is obviously a very difficult decision and requires careful consideration. First, I’d like to elaborate a little more and give some examples of specific responsibilities of each of these roles that Mark has outlined.

The first role is the executor. This is probably the most common and well-known role in estate planning. The executor comes with many names, including personal representative, administrator, executrix, and agent. These all serve the same purpose, which is to represent and manage your estate.
In managing the estate, this can involve representing and acting on behalf of the estate, identifying assets and debts, and distributing those assets according to the will or intestacy laws. To illustrate this more, some common responsibilities of the executor include opening the estate, obtaining the death certificate, allocating and managing assets, filing a tax return, and paying the expenses and debts of the estate. This individual represents your wishes through your estate, so it’s very important.

Trustees are another key role. Trusts are a powerful tool in an estate plan that lets you control your legacy and how you want to leave it behind. Trustees are the individuals appointed to manage the assets held within a trust. They’ll distribute trust assets according to the trust provisions, so your wishes should be expressed through the trust document.

Many people confuse the roles of trustees and executors, but the key difference is that trustees manage assets according to the trust provisions, while executors are the personal representatives for your estate. Some common tasks for trustees, which are similar to those of executors, include obtaining death certificates, filing tax returns for the trust, and managing the assets.

The next important document is the power of attorney. Powers of attorney can be one of the most useful estate planning documents. Let’s break down what a power of attorney actually means. It’s the power to act on behalf of the principal in any and all matters. There are two specific types of powers of attorney: general power of attorney and healthcare power of attorney. A general power of attorney allows the agent to perform almost any act as the principal, and this can be durable or non-durable. A non-durable power of attorney stops immediately when you become incapacitated, which can present challenges if you want someone to make decisions if you become incapacitated. A durable power of attorney continues even if you become incapacitated.

A healthcare power of attorney allows someone to make healthcare decisions for you. This is different from a living will, which allows you to make certain end-of-life care decisions. A healthcare power of attorney allows for other healthcare decisions, such as discharging or admitting someone to the hospital, choosing treatments or medicines, and accessing medical records.

The biggest question is, who should you select for this role? Probably the most intuitive factor is the trustworthiness of the individual. They should be someone you trust, who is honest and full of integrity. Many financial professionals believe that these people should have financial, legal, and business acumen, but they should also have the right temperament. Choosing someone who is a peacemaker and can build consensus can resolve a lot of emotional conflicts between family members. Having someone close or available to speak with professionals or close to the estate or deceased person can make things really smooth and efficient.

Lastly, age is also a common question we get. Choosing someone of the right age and maturity level depends on each case, but all these factors should be considered. Now, I’d like to turn the time over to Daniel to talk about a few things.

Update/Review Your Estate Plan (20:35)

Daniel Ruske: Thank you, Carson. In this section, we will cover potential red flags and the most common reasons why you may need to review and update your estate plan. First, ask yourself, when was the last time I reviewed my estate planning documents? If you can’t remember, it’s probably time. Estate attorneys suggest that households should read over and review estate plans at least every two to three years. They also suggest actually sitting down with an attorney to review potential changes every five to six years. If your estate documents still list your brother as the guardian of your children in the event of an accident and your children now have their own children, it might be a good time to update your plan.

The next reason you may consider updating your estate plan is because of law changes impacting your plan. For example, in 2011, a law was passed impacting how much a person can pass on to their heirs without incurring any estate tax. In 2009, any amount passed on to heirs over $3.5 million would be subject to a 45% estate tax. Because of this, complicated strategies were often implemented in an attempt to avoid estate taxes. Those strategies are now most likely irrelevant and unnecessary.

The amount that can be passed on to heirs without any estate tax has increased every year. That amount is now $11.7 million for each spouse. This means that in 2021, a married couple can pass up to $23.4 million, made up of $11.7 million for each spouse, to their heirs free from federal estate tax, as shown on the chart.

Another law change impacting estate plans happened in December 2019. A non-spouse beneficiary of an individual retirement account, so in most cases your children, must liquidate their entire account within 10 years. This change can create potential tax issues if the trust is listed as the beneficiary and the trust does not have the correct look-through wording. Without this correct wording, inherited IRAs run the risk of being taxed at the trust rates, which are often less favorable than the individual beneficiaries’ rates. Because of this, it is common for attorneys to suggest directly listing beneficiaries on your IRA accounts as opposed to the trust. Consult with an attorney to verify your trust is up to date on this change.

Estate tax has been a talking point for the current presidential administration. Periodically review your plan with an attorney to keep it up to date.

Lastly, here are some additional red flags to alert you that it may be time to review your estate plan. First, have there been any major changes in your assets? Your plan may have been put into place before you experienced significant income or business growth. This includes any buying or selling of property and large inheritances received.

Moving states is an automatic reason to have your estate plan reviewed. It is recommended that each of your documents is in full compliance with your new state’s laws and that these documents still do what you intend for them to do.

Carson mentioned what to look for when choosing some of the key roles involved in your estate plan. These individuals’ age and their situations may change. If anyone involved in your plan experiences a marriage, divorce, death, or disability, review your plan to verify they are still the correct choice.

This should give you some good ideas about how, when, and how often to review your estate plan. I’ll let Scott continue with common mistakes individuals make with their estate plans.

Common Mistakes (24:29)

Scott Peterson: Thank you, Daniel. Yeah, I’m going to go through the common mistakes that I’ve seen over my career about what people do incorrectly with their estate plans. First of all, dying without a plan, or dying intestate, means dying without a plan. We don’t see it very often simply because we have the good fortune here at Peterson Wealth Advisors to work with people who are organized and have planned well for their retirement. Therefore, we manage their money. Usually, people who don’t have this kind of foresight are the same people who won’t have a plan.

Occasionally, we do come across people who have not done any type of estate planning. Let me explain that if you die without an estate plan, without a will or a trust, you forfeit the opportunity to choose who’s in charge of your estate, and you will not have any input on how your estate is divided. If you die intestate, that doesn’t mean there isn’t a plan for the disposition of your estate. There is. The state in which you live has a plan as to how to divide your estate. So I guess the question you have to ask yourself is: Do you want to choose what happens to your estate and who you leave your assets to, or do you want the government or your state to decide for you?

We had a situation where we managed the money for the heirs of the estate of a deceased federal judge who died intestate back in 1978. It took many years and thousands of dollars to unwind the mess he left behind because he didn’t take a couple of hours to draft an estate plan. Now, I will be honest with you; it did not take 43 years to settle the estate. They weren’t working full-time on that, but it did take several years and lots of money to unwind this mess. It’s just so sad because it could have been taken care of with just drafting a simple will or trust.

The second thing I see is people dying with outdated or incomplete estate plans. This is much more common. Most of our clients have some kind of estate plan, but we often see that it’s outdated or incomplete. It holds assets that are improperly titled. With an outdated or incomplete plan, it is likely that your heirs will end up having to take your estate through the probate process.

Probate is the court proceeding that takes place when an estate is void of a trust. Probate can be expensive and time-consuming. It’s very public, and you lose your privacy as your family takes your estate through probate. Another thing I’ve noticed is that probate invites conflict among your heirs. And I think it’s so unnecessary. The only way to escape having your estate go through the probate process is by having a trust.

Now, if you only have a will and not a trust, you are forcing your heirs to go through probate with your estate. A will has no legal force outside of probate. Some of you might ask, “Why would I choose a trust over a will if wills are cheaper?” Well, with a will, you are ensuring that your family will go through the probate process. The will simply acts as the document to instruct the judge on how you would like your probate to proceed. We prefer trusts, even though they are a little more expensive to set up, because they will save your family time, effort, and money. They will be able to avoid the probate process if you have a trust.

So, my recommendation is to pay attention to changes in your life and with your family, and keep your documents up to date.

Item number three: assets are not properly titled. This is a big mistake. There’s a common misconception that I often hear, which is that your assets must be listed or written in your trust document for them to be included in your trust. This is simply not true. The truth is that all of your assets must be owned by your trust to be included in your trust.

Your real estate should be owned by your trust, your investments should be owned by your trust, and your checking account should be owned by your trust. This means that you must actually deed your real estate from yourself to your trust for it to be included. Assets not owned by your trust often require probate to be transferred into the trust. Of course, there’s an exception to every rule, and the exception here is with retirement accounts. Retirement accounts, such as your IRAs and Roth IRAs, cannot be owned by trusts because they are individually owned. In most instances, trusts should likewise not be the beneficiary of retirement accounts, but we can go over that information with you as we meet with you and review your individual situation.

Next item: forgetting to establish a Special Needs Trust when one is required. Those with disabled or handicapped loved ones need a special trust provision. A Special Needs Trust is designed to allow a handicapped or disabled loved one to receive their inheritance while at the same time protecting their ability to continue to receive SSI or state assistance.

Next, choosing the wrong person for the wrong job. Carson explained the roles of trustees, the powers of those who hold power of attorney, and the responsibilities of those trusted to make medical decisions for you when you can’t make them for yourself. I suggest being thoughtful and careful about whom you give these responsibilities to. Sometimes clients say, “I’ll have my son or daughter handle this because I left them out of other decisions.” This isn’t a time to try to be fair or spread the love, so to speak. This is the time to choose the right person for the right job.

Next, creating a trust with unintended consequences. Let me tell you a story about a dentist we worked with who was very well-to-do. When he passed away, he desired to leave $20,000 to each of his grandchildren, but with the stipulation that each grandchild had to have a college degree before they could receive the money. When we tracked down the different heirs, we found the most successful grandchild, who was the vice president of one of the largest trucking companies in America. He laughed when we told him about the college degree requirement and said, “I don’t have a college degree, and it would cost me so much money to drop everything and go back to college. Forget it. Give the money to the others.”

Grandpa had good intentions. He wanted his grandchildren to be productive, but his most productive grandchild didn’t meet Grandpa’s expectations. I think Grandpa would have felt that his grandson should have received part of the inheritance regardless. This story illustrates the importance of thinking through your own situation.

Lastly, I see the mistake of creating trusts that force heirs into business with each other. Whether you own a cabin, a houseboat, a timeshare, or even BYU football tickets, these assets can cause family disputes, especially when unclear instructions are left as to how these assets should be shared or managed. I’m not suggesting that you should never leave these kinds of assets to your heirs, but if the kids can’t get along sharing these assets while you’re alive, what makes you think they’ll be successful sharing ownership once you’re gone? Sometimes the best option is to simply sell everything and split things equally. It’s double trouble when estate plans force cousins into business with each other.

I’ll give you an example. We have a client whose family has had this prime piece of real estate in Hawaii for years and years. Well, mom and dad died, and now we’re working with the son. They’ve had this property, and some of the siblings want to sell, while others want to hold on to this piece of property. They could never make a decision. Now the siblings are dying, and the cousins are involved. If the siblings couldn’t make a decision, guess what? The next generation, the cousins, will never be able to make a decision. I just see this is not going to end well.

We have another situation that I want to share with you. We have a wealthy individual in Idaho that we work with. He passed away and left his estate to his daughters. They have an apartment complex that they own and want to hold on to together within the wealthy gentleman’s estate. He left instructions that one of the daughters should administer the property and be compensated fairly for it. Well, the question is, what is fair? One of the daughters is managing the property and takes almost 45% of the total revenue as a management fee. That doesn’t go over well with the other daughters, but they’re not going to do much about it. So, be thoughtful, be specific, and avoid some of these mistakes.

Now, let’s turn some time back over to Mark to talk about some estate planning opportunities that you may not have been aware of.

Making the Most of Your Estate Plan (34:52)

Mark Whitaker: Thank you, Scott. Reviewing and tying together a few of the ideas that we’ve covered so far in this presentation, Daniel touched on the new limits for estate taxes. Under current law, estates are tax-free up to $11.7 million per person, so over $23 million for a couple. One of the things we see is that in older estate plans, because they were created under different estate tax laws, there are strategies in place to help reduce the estate tax bill, which frankly is just not really an issue anymore.

Another thing we commonly see in estate plans is the desire to do some form of charitable giving. From my experience, what I’ve seen with our clients is that their desire to give to charities, their church, or the Red Cross has nothing to do with wanting to save taxes. It has everything to do with fulfilling a higher calling, a higher purpose that’s important to them. So, when we think about an estate plan, the question to ask is, is there a way to receive some tax benefit for what you were already planning to do? If you were already planning on giving to a charity, is there some way to get a tax benefit for that? The answer is yes. I’m going to talk about one of the ways that can be done, and this is a strategy applicable to most people, including many of our clients and those listening to this webinar.

Option number one: let’s say that you have the desire to pass on 20% of your family estate to your church or the Red Cross when you pass away. You can do that when you pass and receive no tax benefit because, as we said, if your estate is under $11.7 million, that was all going to be tax-free anyway.
Option number two: you can make that donation while you’re living and receive an income tax deduction. Here, there are two tax codes: the estate tax code, which applies to people with estates over $11.7 million, and income tax, which most of us are subject to while we’re living.

I’ll talk about how this can be done. Another reason why people plan to donate after they’ve passed away is that they know they won’t need the money anymore. They feel comfortable donating a portion of their estate at that point. This all needs to be done in the context of a greater plan, ensuring you have enough assets set aside to take care of your income and other important things. Assuming you’ve done that, this is a strategy you could consider.

Many of our clients have discussed at length a tool called a Donor-Advised Fund. What is a Donor-Advised Fund? It is a public charity usually set up by investment institutions. There are thousands of these companies in the United States, including Charles Schwab, Vanguard, and Fidelity, which provide Donor-Advised Funds.

A Donor-Advised Fund allows you to make a large contribution or donation of cash or directly donating investments, real estate, interests, and businesses. It allows you to get the tax deduction all upfront. The benefit of the donor-advised fund is that once you’ve made that donation, the money sits there, and you still have access and control over it. The money in the Donor-Advised Fund can be invested, giving you the opportunity for growth, and you have the ability to make grants over time. If you make this large donation, you don’t have to give all the money to your church in one year. You could put the money into the donor-advised fund and use it to pay tithes and offerings to your church, donate to your local food bank, or fund your granddaughter’s mission. You can do this on a year-by-year basis, maintaining total control.

When we think about estate planning, one of the benefits or important aspects of a good estate plan is the ability to promote and pass on your values. That’s really a big part of your legacy—passing on your values to your family. What are the things that are most important to you, more important than money, that you would like your family to understand and make a part of their lives? A Donor-Advised Fund, interestingly enough, can be a way to actually make this happen.

We talked about the tax deduction you get upfront. It provides the flexibility to make gifts over time. Once the money is in this Donor-Advised Fund, it can continue on after your death. One popular application we’ve seen is having a perpetual mission fund. This pool of money can continue past your death to fund and support service missions by your grandchildren. We’ve also seen families get together and collaborate on charities or causes they want to support, allowing grandchildren to participate in thinking about charities they want to be involved in, doing the research, and then using money from Grandma and Grandpa to fund those initiatives. A Donor-Advised Fund is a way for you to incorporate an income tax strategy into your estate plan.

Now, I’ll turn the time back over to Scott.

Conclusion (41:25)

Scott Peterson: Thank you, Mark. Before we conclude, I just want to ask our panelists if we have any questions from the chat room that we should address.

Mark Whitaker: Yeah, actually, Scott, we do have one here. The question is: If you have a list of beneficiaries on your trust or will, but you have someone different listed as the beneficiary on your IRA account, where does the money actually go? I think that’s a really good question.

Scott Peterson: Well, I can field that. Any one of us could.

Mark Whitaker: Maybe I’ll just go ahead and jump in. So, yeah, great question. Frankly, as Daniel talked about, one of the reasons to review your estate plan periodically is to ensure there are no contradictions. In this instance, if you have a listed beneficiary on a retirement account like an IRA, regardless of what your trust or will says, the money will go to the beneficiary listed on that account. It’s always important to ensure the various components of your estate plan are not contradicting each other. Great question.

Scott Peterson: Okay, I’m going to throw something in that’s not according to our script, but I think it’s important. Some of the greatest mistakes I see people make involve the disposition of their hard assets like furniture, guns, or jewelry. How should that be done to keep families from fighting? Believe me, we’ve seen fights over the silliest things.

For example, one family we worked with had two brothers who were very close. When their dad died, they couldn’t decide who got Dad’s baseball bat. I hope these brothers are back together now and have made amends, but there was a big fight over the baseball bat. It was silly but significant. So, what’s the proper way to handle this to avoid family conflicts?

There’s a schedule in a trust called Schedule A, where you list these hard assets that don’t have a title, like jewelry and guns, and specify who they should go to. In my own family, my dear grandmother told each girl cousin individually, “Honey, because I love you so much, I want you to have this organ.” She forgot she had promised it to multiple granddaughters, and when she passed, there were ten young ladies lined up for Grandma’s organ. It was a mess. Using Schedule A in your trust is the way to do it. Don’t do it by putting pieces of tape on items; put it in your Schedule A provided in the trust.

Any other questions before we conclude?

Daniel Ruske: I wanted to hop in here. There was a question about clarifying the exclusion amount—the $11.4 million. On the chart, it might have been misleading. The taxes aren’t applicable to the $11.4 million; that’s the exclusion amount per person. Anything above that amount is subject to estate tax.

Mark Whitaker: So, the estate is tax-free up to that high-water mark of $11 million and change per person, and the estate tax applies only to the amount above that mark.

Scott, as you were talking about the grandma promising the organ to ten different granddaughters, one thought that came to mind is that you might consider making those sentimental gifts while you’re still alive. You don’t have to wait until you pass away to give away all of your things. You can start now. Just a thought.

Scott Peterson: Anything else out there? I’m sure there have been other questions asked that we have not addressed here. And again, we promise we’re going to follow up with you to make sure your questions are answered.

So, just a couple of concluding remarks I’d like to make. First of all, let’s talk about your estate plan. It must be comprehensive. That means your estate plan must take care of the future without knowing what the future is going to be. It must be easy to administer. It must be easy for you and your family to follow. And I would suggest that it must be reasonably priced. It must be cost-efficient.

You’ll need an attorney who specializes in the estate planning arena, one that can carefully and skillfully draft the documents that you’ll need to protect you and your family. Okay. So, how do I go about choosing the right estate planning attorney? Well, I think you need to ask the right questions. Let me give you some questions that you should consider asking your potential candidates to do your estate planning.

Number one: How long have you been practicing? What we’re looking for here is experience. I don’t care how good their law school was. I want somebody who’s been around, has settled estates before, has been through the probate process, and has some experience with this kind of stuff drafting my own trust. So, look for experience.

Can you tell me about your practice? What we’re looking for here is a specialist, not a jack-of-all-trades. I don’t want somebody doing my estate planning and also doing divorces, bankruptcies, litigation, family law, and then a trust too. That’s not the guy you want. You want an estate planning specialist.

I’d ask the question: So, what exactly will you be doing for me? Is the attorney going to just draft your estate planning documents or are they going to follow through to see that your assets are properly titled in the name of your trust? Will they create the deeds that transfer your real estate to your trust? These are some questions you need to find out.

And then, of course, we need to ask the question: What is the cost for you to help us create an estate plan? There are times in life when you don’t buy the cheapest deal. You don’t go to the cheapest surgeon, you don’t buy your parachutes from the thrift store, and you don’t get your estate planning done by the cheapest attorney in town. A good estate planning attorney will save your family heartache, time, conflict, and money.

So, having said that, let me give you the range of prices that we see right now in the estate planning arena. In the last couple of months, I’ve seen anywhere from about $1,300 to as high as $2,000. That’s kind of the range you should expect to pay to have this comprehensive estate plan done for you. So, interview a couple of attorneys and decide. I think that’s where you’ll see the price right there.

If you need a referral to a good estate planning attorney, we work with a lot of them. Let us know, and we can send you in the right direction. It’s interesting that you might have very competent attorneys, and we’ll send one client to a certain attorney and another client to another attorney because that certain attorney may specialize in business estate planning, while another does a real good job with retirees. So, it kind of depends on what you’re looking for, but we can point you in the right direction.

Thank you very much for joining us today. It’s interesting, this new technology. Of course, I’m from the old school. I’d love to meet with you face-to-face and see your eyes in front of me and answer your questions face-to-face. But we evolve with the times, and we’re just thankful that we had the opportunity to meet with you on this Zoom call.

For Peterson Wealth Advisors clients, Becki will be calling you to set up your estate plan review during the next couple of months. So, we’ll be in touch. Again, you’re very welcome to give us a call if we generated some questions that need answering before then. But we plan on talking to you.

If you’re not a client of Peterson Wealth Advisors, please still feel free to call or email us to set up a consultation with one of our Certified Financial Planners™.

Again, thank you very much for spending your time with us today. If you have any questions regarding any issues that we brought up today, please contact us. We’d love to be a resource for you. Thank you, and have a wonderful day.